More than half (61%) of plan sponsors now offer Roth
contributions in their 401(k) plans, according to a report from T. Rowe Price Retirement
Plan Services.

This is a 50% increase since the end of 2015 and the biggest
one-year increase in Roth contribution adoption since the company began
tracking the figure in 2007.

The same report also indicated that adoption of
automatic plan features has been on the rise since the Pension Protection Act of 2006. The
number of plans with a 6% default deferral rate or more has doubled since 2011,
with 33% of plans offering this higher rate in 2016. The industry standard for
the past 10 years has been 3%.

The percentage of plans adopting automatic deferral increase grew from 63.3%
in 2011 to 71.5% in 2016. Similarly, automatic enrollment increased from 39.8% in
2011 to 54.5% in 2016.

Participation rates continue to be strongly tied to the
adoption of auto-enrollment, with participation 42 percentage points higher in
plans with auto-enrollment than in those without it.

Pre-tax deferral rates continued to increase in 2016 and now
stand at 8%, the highest rate since before the financial crisis. T. Rowe Price
accounts the improvement to plan sponsors raising the default
deferral rate for their plans and improved market conditions.

Furthermore, plan adoption of target-date portfolios
continued to rise. In 2016, 93% of plans at T. Rowe Price offered target-date
portfolios. Additionally, 55% of participants invested their entire account
balance only in target-date funds, an increase of nine percentage points
since 2013.

The firm also found the percentage of participants with
loans at the end of 2016 is down marginally to 23.8%, which is the lowest since
the height of the financial crisis in early 2009.

The ratio of direct rollovers to cash-outs continued to
strengthen with rollovers increasing to 81% in 2016, compared with 71% in 2009.
Cash-outs decreased to 19% in 2016, compared with 29% in 2009. Meanwhile,
hardship withdrawals declined, with only 1.4% of participants in plans at T.
Rowe Price taking such a withdrawal, compared with the 2% industry average.

These findings come from T. Rowe Price’s 2016 update of
Reference Point, an annual benchmarking report of employer-sponsored retirement
plans based on T. Rowe Price’s full-service recordkeeping client data. The full
report can be accessed at TRowePrice.com.